TMI Tax Updates - e-Newsletter
July 13, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Indian Laws
Highlights / Catch Notes
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GST:
Refund of Input Tax - rejection on the ground that there was a mismatch between the export value and the net ITC when compared to monthly returns - The impugned order, is non-speaking. - no reasons have been adduced for the rejection of the request. Bearing in mind the violation of principles of natural justice, the impugned order of rejection is set aside. - HC
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GST:
Provisional Attachment of Bank Account - Section 83 of the Central GST Act - Since the petitioner has not taken to recourse to sub-rule (5) of Rule 159 of the said Rules, interference is denied at this stage - However, the petitioner is granted a week’s time to approach the Additional Director General under the said provision and if such an approach is made, a reasoned order shall be passed after extending an opportunity of hearing. - HC
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Income Tax:
Deemed dividend u/s 2(22) - money lent to the assessee was received in the ordinary course of business for fulfillment of business supply through consolidated negotiation. It is also demonstrated by the assessee that similar advance was obtained in the earlier years right from AY 2010- 11 where assessee was not a shareholder in the lender company at all - No Additions could be made by way of deemed dividend - AT
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Income Tax:
Penalty levied u/s 271(1)(b) - failure to comply with the notices issued by the A.O u/s 142(1) - the non-compliance on the part of the assessee is due to the reason of not receiving the notice issued by the A.O - in the facts and circumstances of the case when the assessee has explained a reasonable cause for failure to comply with the notices issued by the A.O u/s 142(1) the penalty levied u/s 271(1)(b) of the Act is not sustainable and liable to be quashed - AT
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Income Tax:
Rejection of books of accounts - estimation of income - Unexplained Investment in Purchases - A.O has accepted all other transactions of purchases and payment made through bank account of Sikha Jaisawal but pick up this transaction due to the reasons that the same is not recorded in the books of accounts of the assessee. Once, the source of the payment of the purchases is not in dispute then the same cannot be treated as unexplained investment. - AT
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Income Tax:
Offences u/s 276 B read with 278B - petitioners paid TDS amount collected from the employees, belatedly after a period of eight months - It is for the competent authority to take a call on the documents to be produced by the petitioners for substantiating their case that they are having reasonable cause for such failure for payment of the TDS amount and therefore, the matter is remitted to the first respondent to consider the issue afresh, as per the provisions u/s 278AA and 279 (2) - HC
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Income Tax:
Assessment u/s 143(3) - the e-filing portal, maintained by the revenue, was not functional - these are good enough reasons for us, to set aside the impugned assessment order, with liberty to the AO to continue the assessment proceedings from the stage at which they were positioned when the show cause notice dated 11.06.2021 was issued. It is ordered accordingly. - HC
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Income Tax:
Validity of order passed by National Faceless Assessment Centre (NFAC) u/s 143 (3) read with Section 144-B - Requirement of preparing a draft assessment order u/s 144-B - challenge is that the order is violative of the principles of natural justice - This Court sets aside the impugned assessment order of the NFAC as well as all consequential demand notices/orders and grants liberty to the Department to pass a fresh assessment order for the AY in question in accordance with law - HC
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Customs:
Seeking direction to respondents to cause release of the goods imported without payment of demurrage and container detention charges - Regulation 6(1) (I) of the Handling of Cargo in Customs Areas Regulations 2009 - This Court is of the considered opinion that in between disputes, more specifically, with the Service Provider and the importer or exporter has not been considered in any of the judgments produced by the petitioners. Therefore, this Court is of the opinion that the Detention certificate issued under the provisions of the Customs Act is reiteration of the legal position, which is binding on the Service Provider. - HC
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Customs:
Dishonor of Detention Certificate - seeking permission for clearance of goods without payment of demurrage and container detention charges in terms of Regulation 6 (1) (l) of Handling of Cargo in Customs Areas Regulations, 2009 - The contractual relationship between the service providers, who is a private person and the petitioner cannot be resolved under writ jurisdiction by the High Court - thus, based on the Detention Certificate issued by the Customs Authorities, the petitioner has to adjudicate the same before the Competent Forum or claiming recovery of refund.- HC
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Customs:
Provisional release of the seized goods - pendency of proceedings - the legislative intent in section 110A, introduced by way of an amendment, is clear that even during pendency of proceedings before the adjudicating authority, such authority is conferred the discretionary power to allow provisional release. - The writ petitions are disposed off granting liberty to the adjudicating authority to carry forward the proceedings initiated under section 124 of the Act in accordance with law. - HC
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Indian Laws:
Dishonor of Cheque - validity of Authorization to file a complaint on behalf of company - This Court is of the opinion that in the present cases the company has been duly authorized an authorized person. If the accused arrayed in this cases wants to disputes those facts and statements, the said issues may be raised at the time of trial of the cases and opportunities should be given to the complainant to show before the learned Magistrate - HC
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IBC:
Seeking withdrawal of Corporate Insolvency Resolution Process - Locus of the application being shareholder of the corporate Debtor - a person who is aggrieved or whose interests are going to be prejudiced would prima facie have a locus to file an application as a stranger to the proceedings cannot approach. In the present case, this application has been filed by a joint shareholder and it has not been the case of Interveners that such joint shareholder is not having any interest in the subject matter. Therefore, the prima facie locus of the applicant gets established. - Tri
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IBC:
Initiation of CIRP - Corporate Debtor sought to reopen the application - Appellant had paid the due amount in full and final settlement with the Respondent/Operational Creditor - the ‘Adjudicating Authority’ had not granted permission to the Appellant and further mentioned that the prerogative to file a reopen application vests only with the Respondent/Operational Creditor and not with the ‘Corporate Debtor’. - the ‘Adjudicating Authority’ directed to dispose of the said application in accordance with the I & B Code and IBBI Regulations as expeditiously as possible - AT
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IBC:
Challenging the approval of Resolution plan -Delaying Tactics - This ‘Tribunal’ taking note of the divergent contentions advanced on either side and also bearing in mind the facts and circumstances of the present case, in a conspectus comes to a resultant conclusion that the ‘Adjudicating Authority’ (National Company Law Tribunal, Cochin Bench) had in application had come to a correct conclusion on 22.02.2021 that the ‘Appellant’/‘Applicants’ claim for rejection of ‘Resolution Plan’ could not be entertained at the stage when ‘Resolution Professional’ had filed the ‘Resolution Plan’ before it, and also when the Plan was to be approved. - AT
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Service Tax:
Levy of service tax - Agreeing to the obligation to tolerate the Act - The amount received by the appellant in terms of Machine Availability clause, from the service provider with reference to maintenance of WTG due to shortcoming in said service is merely an amount to safeguard the loss of appellant. The said amount cannot be called as consideration for the tolerance of service provided and some lacunae thereof nor it makes the appellant the service provider. - The concept of ‘Declared Services’ has therefore been wrongly invoked by the Department and the adjudicating authority below. - AT
Articles
Notifications
DGFT-
14/2015-2020 - dated
12-7-2021
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FTP
Supply of essential commodities to the Republic of Maldives during Year 2021-22 to 2023-24
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13/2015-2020 - dated
12-7-2021
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FTP
Amendment of Policy conditions of Chapter-48 of ITC (HS), 2017, Schedule-I (Import Policy)
GST - States-
S.O. 122 - dated
9-7-2021
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Bihar SGST
Amendment in Notification No. S.O. 110 dated the 6th May, 2020
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S.O. 121 - dated
9-7-2021
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Bihar SGST
Seeks to rationalize late fee for delay in filing of return in FORM GSTR-7
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S.O. 120 - dated
9-7-2021
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Bihar SGST
Amendment of Notification No. S.O. 04 dated the 2nd January, 2018
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S.O. 119 - dated
9-7-2021
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Bihar SGST
Amendment in Notification No. S.O. 124 dated the 23rd January, 2018
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S.O. 118 - dated
9-7-2021
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Bihar SGST
Amendment in Notification No. S.O. 09 dated the 3rd January, 2019
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S.O. 117 - dated
9-7-2021
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Bihar SGST
Amendment in Notification No. S.O. 101 dated the 29th June, 2017
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60/2020– State Tax - dated
7-7-2021
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Delhi SGST
Delhi Goods and Services Tax (Ninth Amendment) Rules, 2020
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(4-E/2021) FD 02 CSL 2021 - dated
9-7-2021
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Karnataka SGST
Karnataka Goods and Services Tax (Sixth Amendment) Rules, 2021.
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(4-D/2021) FD 02 CSL 2021 - dated
9-7-2021
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Karnataka SGST
Karnataka Goods and Services Tax (Fifth Amendment) Rules, 2021.
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(16/2021) FD 16 CSL 2021 - dated
9-7-2021
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Karnataka SGST
Supersession Notification (47/2020) No. FD 03 CSL 2020, dated the 8th December, 2020
Income Tax-
78/2021 - dated
9-7-2021
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IT
U/s 10(46) of IT Act 1961 - Central Government notifies ‘Haryana Building and Other Construction Workers Welfare Board’ in respect of the specified income arising to that Board.
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (7) TMI 430
Provisional Attachment of Bank Account - Section 83 of the Central GST Act - provisions of sub-rule (5) of Rule 159 of the Central GST Rules not taken into account - HELD THAT:- It is clear that sub-rule (5) of Rule 159 of the Central GST Rules provides a remedy if any particular order of attachment under sub-rule (1) leaves a party, subject to tax, aggrieved. Such a remedy, as made available by the said Rules, is not an ineffective remedy but on the contrary, if sufficient case is set up, substantial relief can be granted to the objector. It is for the petitioner to satisfy the Additional Director General that for the reasons urged, the property ought to be released from attachment by making an appropriate order in Form GST DRC-23. The position as to whether the impugned order, in fact, seeks to protect the interest of the revenue or is otherwise, including the balance in the current account as submitted by the petitioner, would require a factual examination and determination.
Since the petitioner has not taken to recourse to sub-rule (5) of Rule 159 of the said Rules, interference is denied at this stage - However, the petitioner is granted a week’s time to approach the Additional Director General under the said provision and if such an approach is made, a reasoned order shall be passed after extending an opportunity of hearing.
Writ petition disposed off.
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2021 (7) TMI 429
Refund of Input Tax - rejection on the ground that there was a mismatch between the export value and the net ITC when compared to monthly returns - inadvertent omission to take into account two invoices relating to the month of March - personal hearing not afforded to the petitioner - principles of natural justice - HELD THAT:- The impugned order, is non-speaking. In fact, there is a column available for reasons on the basis of which the claim has been either accepted or rejected. However, this column in the impugned order is conspicuously blank and no reasons have been adduced for the rejection of the request. Bearing in mind the violation of principles of natural justice, the impugned order of rejection is set aside.
The petitioner will appear before the respondent on Monday, the 19th of July, 2021 at 10.30 a.m. without expecting any further notice in this regard - Petition disposed off.
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2021 (7) TMI 424
Confiscation of conveyance - Petitioner/owner has not been granted an opportunity of hearing before passing the said order of confiscation - principles of natural justice - HELD THAT:- Without going into the merits of the case, it is directed that the petitioner shall be at liberty to pay ₹ 2,31,234/- towards the amount of fine in lieu of the confiscation of the conveyance in question as contemplated in the proviso to Sub-section (2) of Section 130 of the CGST Act, before the concerned respondent authority within a week from today. If such payment is made by the petitioner, then the concerned respondent authority i.e. respondent No.1 shall release the conveyance in question forthwith.
The impugned order dated 21.11.2020 (in Form GST-MOV-11) to the extent of confiscation of the conveyance in question is set aside - It is clarified that the Court has not gone into the merits of the case, nor has gone into the issue of legality and validity of the confiscation of goods in question.
The petition stands disposed of.
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2021 (7) TMI 421
Transitional credit - denial on the ground that the credit taken input service invoices beyond the period of 30 days of the appointed date - HELD THAT:- Learned counsel for the respondent CGST prays for and is allowed 4 weeks’ time to file counter affidavit. Matter be listed after 5 weeks so that petitioner, if so advised, may file reply thereto.
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Income Tax
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2021 (7) TMI 428
Validity of order passed by National Faceless Assessment Centre (NFAC) u/s 143 (3) read with Section 144-B - Requirement of preparing a draft assessment order u/s 144-B - challenge is that the order is violative of the principles of natural justice as no opportunity of hearing was given to the Petitioner - HELD THAT:- Figures of the taxable income and demand for AY 2018-19 in the impugned assessment order of the NFAC are disproportionately high. The impugned assessment order is not only in considerable variation of the figures for the earlier AYs but is also prejudicial to the interests of the assessee - requirement of Section 144-B (1) (xvi) of the ITA Act for triggering the procedure of first preparing a draft assessment order and providing it to the Petitioner for its response stands attracted in this case.
This Court sets aside the impugned assessment order of the NFAC as well as all consequential demand notices/orders and grants liberty to the Department to pass a fresh assessment order for the AY in question in accordance with law - Department shall give the Petitioner a personal hearing on a date and at a time which shall be communicated to the Petitioner sufficiently in advance.
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2021 (7) TMI 414
Rejection of books of accounts - estimation of income - Unexplained Investment in Purchases - HELD THAT:- Once the income of the assessee is estimated by G.P rate no further addition can be made on account of expenditure which is part of the trading account. As far as the unexplained investment is concerned the source of payment is not in dispute as it is clearly made through bank account of one Sikha Jaisawal and the assessee has explained the reasons for such payment through bank account of Sikha Jaisawal. It is pertinent to note that it is not the isolated transaction of payment for purchases through bank account of Sikha Jaisawal but all the transactions from January, 2012 to February, 2012 were made from the bank account of Sikha Jaisawal
A.O has accepted all other transactions of purchases and payment made through bank account of Sikha Jaisawal but pick up this transaction due to the reasons that the same is not recorded in the books of accounts of the assessee. Once, the source of the payment of the purchases is not in dispute then the same cannot be treated as unexplained investment. Accordingly, in view of the fact that the income of the assessee was estimated by the A.O by applying G.P rate after rejection of books of accounts u/s 145(3) of the Act the addition made by the A.O on account unexplained/unaccounted purchases is not sustainable and the same is liable to be deleted. - Decided in favour of assessee.
Reassessment proceedings - addition on account of unexplained deposits made in the bank account - HELD THAT:- As manifest from the details and explanation furnished by the assessee that the assessee has shown the deposits made in the bank account on various dates and also the corresponding payment through cheques and demand draft which were subsequently cancelled in some instance. It is pertinent to note that if the sale proceeds of the assessee are not deposits in any other bank account then the explanation of the assessee that the deposits made by the assessee in the bank account maintained with Bank of Baroda cannot be rejected without verifying these details. Accordingly, in the facts and circumstances of the case and in the interest of justice this issue is set aside to the record of A.O for proper verification of the details as well as facts regarding the source of the deposits and then adjudicate the same afresh, after affording an opportunity of hearing to the assessee.
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2021 (7) TMI 413
Calculation of the interest u/s. 220(2) - order passed order u/s. 143(3) by which the tax was calculated at NIL - HELD THAT:- As decided in BHARAT COMMERCE AND INDUSTRIES LIMITED [1994 (5) TMI 14 - DELHI HIGH COURT] when the very basis of calculation of interest, i.e., the amount of tax payable on the basis of which interest calculation has to be made is unknown the mistake is not apparent from record and the notice under section 154 as well as order under section 154 both are bad and illegal which are liable to be quashed.
Since the ld. CIT(A) deleted the interest by following the binding precedent rendered by Hon’ble jurisdictional High Court, in the absence of any decision to the contrary by any higher forum, we cannot find fault with the findings of the ld. CIT(A). We, consequently find the grounds of appeal as devoid of merits and dismiss the same.
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2021 (7) TMI 412
Penalty levied u/s 271(1)(b) - Reopening of assessment u/s 147 to assess the income on account of deposits made in the saving bank account - failure to comply with the notices issued by the A.O u/s 142(1) - HELD THAT:- Though the AO has issued notice u/s 142(1) as well as the show cause notice u/s 271(1)(b) and u/s 144 of the Act however, all these notices were remained unserved due to the reason that the assessee was not available at the given address. This fact of non availability of the assessee is not in dispute as the assessee already sold this residential house and shifted to Noida.
It is a case of reopening of the assessment for assessing the deposits made in the bank account of the assessee as the assessee was not having any other source of income to be declared in the return of income. Therefore, the non-compliance on the part of the assessee is due to the reason of not receiving the notice issued by the A.O. Once the assessee has settled his dispute arising from the quantum proceedings under Vivad se Vishwas Scheme, 2020 and explained the reasonable cause for default or failure in compliance of the notice issued by the A.O u/s 142(1) then the case of the assessee falls u/s 273B of the Income Tax Act. Accordingly, in the facts and circumstances of the case when the assessee has explained a reasonable cause for failure to comply with the notices issued by the A.O u/s 142(1) the penalty levied u/s 271(1)(b) of the Act is not sustainable and liable to be quashed - Decided in favour of assesee.
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2021 (7) TMI 427
Assessment u/s 143(3) - petitioner claims that, it was unable to respond to the aforementioned show cause notice as the e-filing portal, maintained by the revenue, was not functional - HELD THAT:- As given the fact that, the timeframe set out in the show cause notice dated 11.06.2021 was extremely narrow, and that the e-filing portal was dysfunctional – these are good enough reasons for us, to set aside the impugned assessment order, with liberty to the AO to continue the assessment proceedings from the stage at which they were positioned when the show cause notice dated 11.06.2021 was issued. It is ordered accordingly.
The respondent/revenue will be at liberty to call for further information, if thought necessary, before proceeding to frame the assessment order. In particular, the petitioner will furnish the FIRC concerning GMO, which is presently not on record.
The petitioner will render assistance in every form to the respondent/revenue in passing the fresh assessment order. The statement of Mr. Chopra is taken on record.
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2021 (7) TMI 409
Deemed dividend u/s 2(22) - assessee' s share holding in the company exceeded 10% therefore loan received from KSPPL - CIT-A deleted the addition - HELD THAT:- We find that the CIT(A) has acted on sound legal principles in the light of the facts broadly noticed above. On facts, it has emerged that the lender company has charged interest on the advances made to the assessee company.
As in the case of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] has observed that advances given by the lender was not for the individual benefit of the shareholder but for business purposes and therefore such transactions would not fall within the sweep of deeming fiction created under s.2(22)(e) of the Act. This reason on a standalone basis is sufficient to exclude the applicability of Section 2(22)(e) of the Act on the money received by the assessee.
It is case of the assessee than money lent to the assessee was received in the ordinary course of business for fulfillment of business supply through consolidated negotiation. It is also demonstrated by the assessee that similar advance was obtained in the earlier years right from AY 2010- 11 where assessee was not a shareholder in the lender company at all. It is also simultaneously the case of the assessee that the lender company was substantially engaged in money lending activity.
CIT(A) has acted on sound legal principles in the light of the facts broadly noticed above. On facts, it has emerged that the lender company has charged interest on the advances made to the assessee company. Also in the case of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] has observed that advances given by the lender was not for the individual benefit of the shareholder but for business purposes and therefore such transactions would not fall within the sweep of deeming fiction created under s.2(22)(e) of the Act. This reason on a standalone basis is sufficient to exclude the applicability of Section 2(22)(e) of the Act on the money received by the assessee.
We also simultaneously find merit in the other line of argument advanced on behalf of the assessee - money lent to the assessee was received in the ordinary course of business for fulfillment of business supply through consolidated negotiation. It is also demonstrated by the assessee that similar advance was obtained in the earlier years right from AY 2010- 11 where assessee was not a shareholder in the lender company at all. It is also simultaneously the case of the assessee that the lender company was substantially engaged in money lending activity.
No addition could be made by way of deemed dividend in the case of the assessee as rightly held by the CIT(A) - Decided in favour of assessee.
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2021 (7) TMI 408
Assessment u/s 144 - admission of additional evidence - main grievance of the appellant/assessee is that the Ld. CIT(A) has wrongly declined to admit the additional evidence which the assessee wanted to rely during the appellate proceedings - HELD THAT:- Admittedly, in this case, the AO has passed the assessment order u/s. 144 of the Act and the assessee could neither file any document in support of his contention nor argue his case personally or through his representative. Under these circumstances the assessee had no option but to adduce additional evidence and plead his case before the appellate authority. Hence, the assessee requested the Ld. CIT(A) to admit the additional evidence.
In the present case, since the assessment order had been passed u/s. 144 of the Act, the assessee had no occasion to place on the record the relevant evidence essential for the just decision of the case. Further, it is not apparent from the assessment order that the notices issued/sent to the assessee were served upon him and the despite the service of notices, the assessee failed to appear before the AO. The assessee had no option but to adduce additional evidence before the Ld. CIT(A). Hence, in our considered view, the Ld. CIT(A) ought to have admitted the additional evidence which the assessee intended to adduce. Appeal filed by the assessee is allowed for statistical purposes.
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2021 (7) TMI 405
Disallowance on account of unproved capital - CIT-A deleted the addition - CIT(A) observed that all the capital introduced by the partners has been received from the sister concern through cheques - HELD THAT:- CIT(A) observed that all the capital introduced by the partners has been received from the sister concern through cheques being the total of outstanding capital balance of the partners in the books of the assessee was deleted by ld CIT(A). We note that Hon`ble High Court of Madras
As in the case of Smt. B. Jayalakshmi, [2018 (8) TMI 208 - MADRAS HIGH COURT] held that where Commissioner (Appeals) on basis of remand report of Assessing Officer, allowed claim of assessee, revenue was not entitled to maintain an appeal before Tribunal against said order of Commissioner (Appeals). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.
Disallowance on account of unproved sundry creditors - CIT-A deleted the addition - HELD THAT:- As gone through the reconciliation of sundry creditors and note that the said reconciliation of sundry creditors was not examined by the ld.Assessing Officer during assessment stage. Therefore, we are of the view that said reconciliation chart of sundry creditors should be verified by ld.Assessing Officer.
Therefore, we remit this issue back to the file of the assessing officer with the direction to verify the above reconciliation of creditors and allow the claim of the assessee in accordance with law. Additional ground raised by the Revenue is allowed for statistical purposes.
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2021 (7) TMI 418
Offences u/s 276 B read with 278B - petitioners paid TDS amount collected from the employees, belatedly after a period of eight months - HELD THAT:- In this case, the petitioners have taken out a reasonable cause for the failure on their part in paying the TDS amount that due to financial constraints faced by the company, it was only recorded in the registers, as if salary to the employees was paid, but in fact, the salary was paid to the employees only in the month of September 2012 and immediately they have also remitted the TDS amount with interest for the delayed payment to the department.
It is for the competent authority to take a call on the documents to be produced by the petitioners for substantiating their case that they are having reasonable cause for such failure for payment of the TDS amount and therefore, the matter is remitted to the first respondent to consider the issue afresh, as per the provisions u/s 278AA and 279 (2) of the Income Tax Act and pass appropriate orders on merits and the petitioners are permitted to produce the documents in their support to the first respondent.
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2021 (7) TMI 404
Addition made of interest on sticky loans/NPAs - CIT-A deleted the addition - HELD THAT:- Identical issue had been adjudicated by the ITAT Chandigarh Bench in the case of Kangra Central Cooperative Bank Ltd., Dharamshala (supra). [2017 (1) TMI 1533 - ITAT CHANDIGARH] The ITAT had held the same to be taxable on receipt basis following its decision in the case of Ludhiana Central Cooperative Bank Ltd. [2017 (1) TMI 778 - ITAT CHANDIGARH] wherein it noted, that the judgement of the Hon' ble Gujarat High Court in the case of Pr. CIT- 5 vs Shri Mahila Sewa Sahkari Bank Ltd [2016 (8) TMI 377 - GUJARAT HIGH COURT] and CIT vs Deogiri Nagari Sahakari Bank Ltd & Others. [2015 (1) TMI 1218 - BOMBAY HIGH COURT] was followed.
DR has been unable to distinguish the said case before us, nor has he brought to our notice any contrary judgment of any Hon' ble High Court or the Hon' ble Apex Court on the issue.
Since admittedly the issue stands covered in favour of the assessee by the decision of the ITAT Chandigarh Bench in the case of Kangra Central Cooperative Bank Ltd., Dharamshala (supra) we see no reason to interfere in the order of the Ld.CIT(A) who has deleted the addition so made following the said decision. Appeal of the Revenue is dismissed.
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2021 (7) TMI 403
Rectification u/s 254 - notice under section 143(2) - HELD THAT:- The scope of the provisions of section 254(2) is very limited and only those errors which are apparent or arithmetical can only be rectified. The scope of provisions of section 254(2) of the Act has been repeatedly examined by the Hon'ble Apex Court and various High Courts and it was held that the Tribunal can rectify only those mistakes which are arithmetical or clerical or apparent in its order. The Tribunal has no jurisdiction to review its own order in the garb of rectification. It was also held that if the Tribunal commits an error of judgement, that error cannot be rectified under the provisions of section 254(2) as the Tribunal is not empowered by the statute to review its own order.
Similar views have also been expressed by CIT Vs. Prahlad Rai Todi [2001 (7) TMI 111 - GAUHATI HIGH COURT] by holding that “A bare look at section 254(2) will show that this section gives the power to rectify any mistake apparent from the record and not to amend any order passed by it and to make such amendment if the mistake is brought to its notice by the Assessing Officer or the assessee. So, when we speak of amendment or rectifying the mistake, the earlier order can never be recalled by the Tribunal. The earlier order must hold the field and the mistake can be rectified or amended can be made to the order. The Tribunal cannot, in law and facts, recall and destroy its final order as a whole with a view to rectify the same order under section 254(2) of the Act. The action of the Tribunal actually amounts to review of its earlier order and that power to review is not available to the Tribunal.
No merit in this Miscellaneous Application of the Department, as no error apparent in the order of the Tribunal is pointed out. The ld. D.R. has tried to dispute the findings of the Tribunal and is seeking a review of the order of the Tribunal, which is not permissible under section 254(2)
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Customs
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2021 (7) TMI 425
Provisional release of the seized goods - Cut and polished diamonds - Will pendency of proceedings under section 124 of Customs Act, preclude the consideration of an application for provisional release of goods under section 110A - HELD THAT:- In default of issuance of notice under section 124 of the Act within six months of seizure, the person from whose possession the goods are seized can claim, as a matter of right, return of the seized goods; and in such a case, in view of the second proviso to sub-section (2) of section 110, the specified period of six months to issue a notice would not apply, meaning thereby that a notice could follow even thereafter.
The words “pending the order of the adjudicating authority” are important for the purpose of deciding the question formulated above. We are inclined to the view that notwithstanding the pendency of proceedings initiated by issuance of a show-cause notice under clause (a) of section 124 of the Act, the adjudicating authority may, in its discretion, allow a provisional release on such conditions as he may require fit to impose - the legislative intent in section 110A, introduced by way of an amendment, is clear that even during pendency of proceedings before the adjudicating authority, such authority is conferred the discretionary power to allow provisional release.
The writ petitions are disposed off granting liberty to the adjudicating authority to carry forward the proceedings initiated under section 124 of the Act in accordance with law.
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2021 (7) TMI 420
Dishonor of Detention Certificate - seeking permission for clearance of goods without payment of demurrage and container detention charges in terms of Regulation 6 (1) (l) of Handling of Cargo in Customs Areas Regulations, 2009 - contentions of the petitioners are that once the Statutory provisions contemplate that the goods belong to the Customs Department are confiscated and the Service Provider is not entitled to collect any charges, then they are bound to release the goods and refund the deposit, if any collected - HELD THAT:- Once the imported goods are confiscated by the Customs authorities, they became in possession of the goods and therefore, the Service Provider shall not levy any charges for the said confiscated goods. If at all any deposits are collected in this regard, the said deposits are to be refunded.
In the present case, even the goods are not released and the Service Provider is claiming charges, which is in violation of the Detention certificate issued by the Customs authorities. Thus, the petitioner is constrained to move the writ petition - This Court is of the considered opinion that a thin distinction is to be drawn in between the Detention certificate as well as the relief granted by various Courts with reference to the Detention certificate issued by the Customs Department. The in-between possible or existing disputes are relevant for the purpose of granting the relief and such disputes between the Service Provider and an importer or exporter, cannot be adjudicated in a writ proceedings under Article 226 of the Constitution of India.
In the present case, admittedly, the goods are being maintained by the Service providers. On confiscation, the Customs authorities take possession. However, the goods are still under the custody of the Service Provider. The goods are not taken away from the premises of the Service Provider. Therefore, the grievances of the service provider are also to be looked into and considered, while granting the relief of release of the imported goods or refund of the deposits, if any made - this Court is of the considered opinion that in between disputes, more specifically, with the Service Provider and the importer or exporter has not been considered in any of these judgments relied upon by the petitioners. Therefore, this Court is of the opinion that the Detention certificate issued under the provisions of the Customs Act is reiteration of the legal position, which is binding on the Service Provider.
The undertaking clause in Regulation 5 (5) is to ensure that the service providers implement the provisions of the Act and the Rules as well as the consequent orders issued by the Authorities. However, this Court has held in the aforementioned paragraphs that Detention Certificate is to be construed as Eligibility Certificate for the purpose of claiming refund and the refund is to be granted after resolving the disputes, if any exist between the service providers and importers or exporters. The contractual relationship between the service providers, who is a private person and the petitioner cannot be resolved under writ jurisdiction by the High Court - thus, based on the Detention Certificate issued by the Customs Authorities, the petitioner has to adjudicate the same before the Competent Forum or claiming recovery of refund.
This being the nature of the Detention Certificate issued under the Regulations, this Court is of an opinion that mere issuance of Detention Certificate would not confer any right to get refund directly from service provider, who is a private party - petition dismissed.
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2021 (7) TMI 419
Seeking direction to respondents to cause release of the goods imported without payment of demurrage and container detention charges - Regulation 6(1) (I) of the Handling of Cargo in Customs Areas Regulations 2009 - contentions of the petitioners are that once the Statutory provisions contemplate that the goods belong to the Customs Department are confiscation and the Service Provider is not entitled to collect any charges, then they are bound to release the goods and refund the deposit, if any collected - HELD THAT:- This Court is of the considered opinion that absolutely there is no quarrel with reference to the legal propositions propounded by the learned counsel for the petitioner, which is well founded. Once the imported goods are confiscated by the Customs authorities, they became in possession of the goods and therefore, the Service Provider shall not levy any charges for the said confiscated goods. If at all any deposits are collected in this regard, the said deposits are to be refunded.
In the present case, even the goods are not released and the Service Provider is claiming charges, which is in violation of the Detention certificate issued by the Customs authorities. Thus, the petitioner is constrained to move the writ petition - This Court is of the considered opinion that a thin distinction is to be drawn in between the Detention certificate as well as the release granted by various Courts with reference to the Detention certificate issued by the Customs Department. The in-between agreements, contracts, and disputes are relevant for the purpose of granting the relief and such disputes between the Service Provider and an importer or exporter, cannot be adjudicated in a writ proceedings under Article 226 of the Constitution of India.
This Court formed an opinion that the Detention certificate is nothing but affirmation of the statutory provisions contemplated, more specifically, with reference to Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. Thus, such a certificate undoubtedly provides a right to the holder of the certificate to claim the relief of release of imported goods by the Service Provider or refund as the case may be.
In the present case, admittedly, the goods are being maintained by the Service providers. On confiscation, the Customs authorities take possession. However, the goods are still under the custody of the Service Provider. The goods are not taken away from the premises of the Service Provider. Therefore, the grievances of the service provider are also to be looked into and considered, while granting the relief of release of the imported goods or refund of the deposits, if any.
This Court is of the considered opinion that in between disputes, more specifically, with the Service Provider and the importer or exporter has not been considered in any of the judgments produced by the petitioners. Therefore, this Court is of the opinion that the Detention certificate issued under the provisions of the Customs Act is reiteration of the legal position, which is binding on the Service Provider.
Petition dismissed.
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2021 (7) TMI 401
Seeking direction to comply the Detention Certificate dated 05.06.2018 issued by second respondent - direction to third respondent to refund the amounts collected by them at the time of clearance of the goods in question - whether any rent or demurrage on goods seized is charged, collected or recovered by the Customs Cargo Service Provider? - HELD THAT:- In the present cases, the third respondent is the Cargo Service Provider and the petitioners have deposited some amount and seeks refund. The Customs authorities issued a certificate merely stating that “the request of the Importer for waiver of Detention / Demurrage charges shall be considered from the date of filing of Bill of Entry till the date of clearance of the cargo - this Court has to examine the nature of the certificate issued by the Customs authorities under Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. Definition of a certificate is that 'a document containing a certified statement especially as to the truth of something specifically a document certifying that one has fulfilled the requirements.'
Therefore, the certificate issued under Regulation 6(1)(l) is to be construed for the purpose of eligibility for claiming refund pursuant to the conditions stipulated in Regulation 6(1)(l). In other words, the Customs authorities certified that the importer or exporter is eligible to claim refund, if any excess rent or demurrage is paid with reference to Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009.
Whether issuance of a certificate would provide a cause for seeking the relief of refund directly under Article 226 of the Constitution of India? - HELD THAT:- Presuming that the relief as such sought for in the present writ petitions is granted, merely based on the Detention certificate, in the absence of factual adjudication, undoubtedly, there is a possibility of commissions or omissions, which may lead to miscarriage of Justice. Therefore, the High Court need not go into such disputed facts merely based on the affidavits filed by the respective parties to the writ petition. Mere affidavit would not be sufficient to form an opinion regarding the disputed facts, which all are to be made with reference to the documents and evidences and in consonance with the terms and conditions of the agreement or contract - This being the principles to be followed, the Detention certificate issued by the Customs authorities is to be construed as an eligibility certificate for the purpose of claiming the benefit conferred under Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 and the certificate would not confer any right on the holder of the certificate to claim refund without adjudication of the disputed facts and circumstances with reference to the terms and conditions of the agreement or contract. Such an adjudication cannot be done in a writ proceedings under Article 226 of the Constitution of India. Therefore, for the purpose of adjudication, the parties are bound to approach the competent forum and after resolving the disputes, the refund or otherwise is to be granted by following the procedures as contemplated.
The direction sought for in the writ petitions to direct the second respondent, to direct the third respondent to make refund is coined with an idea to overcome the maintainability of writ petitions. Thus, the prayer as such cannot be granted, in view of the fact that the second respondent has already issued a Detention Certificate, which is to be construed as eligible for the purpose of claiming refund from the third respondent. This apart, the third respondents are Private party and no relief can ordinarily be entertained in a writ proceedings.
All the writ petitions are maintainable. High Courts will not dismiss any writ petition as not maintainable. However, the entertainability of a writ petition with reference to the facts and the principles of law is to be considered for granting the relief - This Court could able to form an opinion that the writ petitioners have not established any right for grant of the relief as such sought for in these writ petitions.
The petition is dismissed.
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2021 (7) TMI 417
Smuggling - 2 gold biscuits - 1 cut piece of gold biscuit - 7 pieces of primary gold - 3 pieces of gold bangles - complaint was filed against the present petitioners in the year 1979 under the provisions of Section 85 of the Gold (Control) Act, 1968, as also Section 135 (b) of the Customs Act, 1962 - HELD THAT:- The conviction itself would be erroneous if the gold did not belong to them, obviously the judgments of the learned trial court and appellate court passed in the year 1980 not having ever been subject matter of any further proceedings, with the conviction of petitioner no. 1 therefore having attained finality, now in these proceedings by which effectively the petitioners seek the return of the gold confiscated, they obviously cannot now at this stage turn around and say that the conviction was erroneous.
The Gold (Control) Act, 1968, having been repealed in the year 1990, no saving clause/substantive provision has been pointed out from the Repealing Act by which any gold confiscated during the validity of the said Act (between 1968 and 1990) should be returned to the person from whom it was seized/recovered.
In the present case, nothing actually remained sub-judice after the judgment of the appellate court affirming the conviction of petitioner no. 1 under the provisions of the Gold (Control) Act, 1968, as also the Customs Act, 1962 and upholding the order of confiscation of the gold recovered from him - If, therefore, this court were to interpret that because of the repeal of the Gold (Control) Act, 1968, all proceedings taken thereunder as had already become final prior to its repealment in 1990, it would amount to directing that all action taken during the 22 years of the operation of that Act, would be null and void and therefore any penalty etc. imposed and all gold recovered during such period would be liable to be returned to the persons from whom it was confiscated.
There being no savings clause or any substantive provision in the Gold (Control) Repeal Act, 1990, to the effect that all action taken during the validity of the said Act would stand reversed, or that the gold seized during the validity of the Act be returned to the person from which it was seized, the contention of learned counsel for the petitioners in that regard cannot be accepted at all.
In any case, with that provision not having been repealed and this court already having held hereinabove that even the proceedings under the Act of 1968 already having become final in the year 1980, the repealment of that Act in 1990 cannot come to the aid of the petitioner - Petition dismissed.
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Corporate Laws
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2021 (7) TMI 411
Mismanagement and oppression - section 241 and 242 of the Companies Act, 2013 - Appellants submits that the First Respondent/Applicant had failed to establish that how his rights as shareholder will get affected - HELD THAT:- It is relevantly pointed out that a ‘Tribunal’ has the requisite power to add or strike out a party at any stage of a given proceedings, in the considered opinion of this ‘Appellate Tribunal’. Further, in Law, to bring a person as a Party/ Respondent/Defendant in a given case/legal proceedings is not a ‘Substantive Right’ but one of ‘procedure’ and the ‘Tribunal’ in this regard, is to exercise its sound judicial discretion. To determine whether a ‘person’ is to be impleaded or otherwise, cannot depend mainly on the aspect as to whether he has an interest in the property, but whether a right of a person would get affected, if not impleaded in a given pending legal proceedings before the ‘Competent Forum’. As a matter of fact, the ‘Tribunal’ can permit even the impleadment of third party, if his/its presence is necessary for adjudication of the subject matter in issue.
In the instant case on hand, the fact that First Respondent/Applicant being a shareholder of the 9th Respondent/Company is not in dispute. It cannot be brushed aside that in the main Company Petition, the Appellants/Petitioners had alleged ‘mismanagement’ and ‘oppression’ in the Company - Appeal dismissed.
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2021 (7) TMI 407
Scheme of Arrangement in the nature of Demerger - seeking dispensation of the meeting of the Equity Shareholders of Applicant Resulting Company/Applicant Transferee Company - seeking directions for convening and holding of various meetings - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- The meetings of the Equity Shareholders of Applicant Resulting/Transferee Company is hereby dispensed with. Since there are NIL Secured and Unsecured Creditors in Applicant Resulting/Transferee Company, question for convening of meetings of Secured and Unsecured Creditors in Applicant Resulting/Transferee Company does not arise.
Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices issued - application allowed.
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Insolvency & Bankruptcy
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2021 (7) TMI 416
Seeking rejection of sanctioned Resolution Plan - Delaying Tactics - rejection of Valuation Report - appointment of another valuer convening another CoC - inequitable provisions which discriminate the ‘employee Doctors’ and ‘Consultant Doctors’ - inconsistent with Article 14 of the Constitution of India - non-compliance with Section 30(2)(e) of I&B Code - discrepancies/anomalies observed in the ‘Valuation Report’ - concept of equality - HELD THAT:- As per Section 31 of the Code, if an ‘Adjudicating Authority’ is satisfied with the ‘Resolution Plan’ is approved by the ‘Committee of Creditors’ under Section 30(4) of the Code that it meets the requirements as contemplated in Section 30(2) of the Code, it shall by an order approve the ‘Resolution Plan’ which shall be binding on the ‘Corporate Debtor’ ‘Employees’ and ‘Members’ ‘Creditors’ and other ‘Stakeholders’ involved in the ‘Resolution Plan’ - It is well settled that it is not open to reopen the reasons for rejection of ‘Resolution Plan’ passed with 100% voting share s for adjudication. No wonder, approval for ‘Resolution Plan’ is to be judged with diligence and ‘satisfaction’ in regard to the ‘Approval of plan’ in writing with reasons to be recorded, of course, with due application of mind.
Rejection of Valuation Report made by the Valuer Mr.R.K.Patel - HELD THAT:- Not resting with that, the ‘Resolution Professional’ had resorted to the agreed ‘International Valuation Standards’ and carried out the physical verification of the ‘Corporate Debtor’s fixed assets. Therefore, the question of appointing a ‘third Valuer’ on the purported ground of difference of 15.92% in the ‘Fair Value’ does not arise, in the considered opinion of this ‘Tribunal’.
Equality Concept - HELD THAT:- One cannot ignore a vital fact that ‘Guarantee of Equality’ before law is a positive concept. The principle of equal pay for equal work has to be granted only if there is total and complete identity between two employees. It is to be remembered that the ‘burden of proving’ the ‘right and parity’ in an ‘employment’ is only on the individual claiming such right. Moreover, it cannot be lost sight of that in respect of the concerned employees ‘functions’ may be same but skills and responsibilities may be really and substantially different. Viewed in that perspective, in the instant case on hand, there is a clear difference and defined arena between the ‘Employee Doctors’ and the ‘Consultant Doctors’ of the ‘Corporate Debtor’. As such the contra plea taken on behalf of the Appellant(s) is not worthy of acceptance by this ‘Tribunal’.
This ‘Tribunal’ taking note of the divergent contentions advanced on either side and also bearing in mind the facts and circumstances of the present case, in a conspectus comes to a resultant conclusion that the ‘Adjudicating Authority’ (National Company Law Tribunal, Cochin Bench) had in application had come to a correct conclusion on 22.02.2021 that the ‘Appellant’/‘Applicants’ claim for rejection of ‘Resolution Plan’ could not be entertained at the stage when ‘Resolution Professional’ had filed the ‘Resolution Plan’ before it, and also when the Plan was to be approved.
Appeal dismissed.
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2021 (7) TMI 410
Initiation of CIRP - Corporate Debtor sought to reopen the application - Appellant had paid the due amount in full and final settlement with the Respondent/Operational Creditor - the ‘Adjudicating Authority’ had not granted permission to the Appellant and further mentioned that the prerogative to file a reopen application vests only with the Respondent/Operational Creditor and not with the ‘Corporate Debtor’.
HELD THAT:- The Appellant had paid the due amount in full and final settlement with the Respondent/Operational Creditor and an ‘acknowledgement letter dated 04.06.2021’ was issued by the Respondent/Operational Creditor to the Appellant/Corporate Debtor, this Tribunal, in furtherance of substantial cause of justice directs the filing of an application for withdrawal of main application in IBA/155/2020 on the file of National Company Law Tribunal, Division Bench – I, Chennai, as per 12A of the I & B Code, Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (vide Form FA) and in accordance with the Law, by the ‘Applicant/Operational Creditor’ before the ‘Adjudicating Authority’ (through the Interim Resolution Professional) within 10 days from today, and in event of filing of said application, the ‘Adjudicating Authority’ shall dispose of the said application in accordance with the I & B Code and IBBI Regulations as expeditiously as possible.
Application disposed off.
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2021 (7) TMI 406
Seeking withdrawal of Corporate Insolvency Resolution Process - Rule 11 of NCLT Rules, 2016 r.w. Section 60(5) of Insolvency and Bankruptcy Code, 2016 - Locus of the application being shareholder of the corporate Debtor - Under which provision of law, the impugned application needs to be dealt with? - HELD THAT:- It is an admitted fact that subsequent to admission of Corporate Debtor into CIRP by the order of this Adjudicating Authority, the amount due to the concerned Operational Creditor has been paid and settled. It is also an admitted position that COC has not been formed as yet, though, IRP has been appointed and IRP is running the affairs of the Corporate Debtor as a going concern and also conducting CIRP in a limited manner. It is also to be noted that Corporate Debtor was admitted into CIRP by an order of this Adjudicating Authority on 18.12.2020 and, thereafter, multiple hearings have taken place. It is also a matter of record that on earlier occasions M/s. KKR India Financial Services was opposing this application and simultaneously they also submitted before this Adjudicating Authority that settlement talks were also going on with the Corporate Debtor.
Locus of the applicant - HELD THAT:- a person who is aggrieved or whose interests are going to be prejudiced would prima facie have a locus to file an application as a stranger to the proceedings cannot approach. In the present case, this application has been filed by a joint shareholder and it has not been the case of Interveners that such joint shareholder is not having any interest in the subject matter. Therefore, the prima facie locus of the applicant gets established.
Under which provision of law, the impugned application needs to be dealt with? - HELD THAT:- The question of non-applicability of Regulation 30A of IBBI (Corporate Insolvency Resolution Process for Corporate Persons) Regulation, 2016, being an instance of not being in terms with the provisions of Section 12A of IBC, 2016 has been raised by the applicant and it has also been contended that Rule 11 of NCLT Rules, 2016 was applicable whereas Interveners have pleaded that this application needs to be considered in accordance with the provisions of said Regulation - On the aspect whether provisions of Section 12A of IBC, 2016 or Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Form-FA were applicable in this kind of a situation, this Authority in the case of HUHTAMAKI PPL LIMITED. VERSUS M/S. MANPASAND BEVERAGES LTD. [2021 (3) TMI 1225 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD BENCH] held that Rule 11 of NCLT Rules, 2016 was applicable and not the Regulation 30A of IBBI (CIRP) Regulations, 2016.
It is also noteworthy that before amending the Regulation 30A of CIRP Regulations, IBBI published a discussion paper thereon along with draft regulation dated 08.05.2019. IBBI, in this discussion paper, took note of various rulings which, inter alia, covered the aspect that Regulation 30A could not override the substantive provisions of Section 12A of IBC, 2016, CIRP could be withdrawn even after issue of EOI in exceptional cases as Regulation 30A (1) was not mandatory but directory.
The practice of delegated legislation is established across all jurisdictions. The scope of delegated legislation essentially depends upon the power given by the parent legislature. There could be an instance where some wide powers are given by legislature by providing policy guidelines in a specific manner and there could be a situation where the legislature may give power of delegated legislation in a restricted manner. To put it differently, in some cases, the executive may even be empowered to frame Rules which may cover a situation not provided in the substantive legislation. This would be of course subject to scrutiny/approval of parliament/legislature at some stage - The Parliament has reserved the power with itself to modify or annul any Rules/Regulations and, in our view, such power unless the provisions of Section 239 or Section 240 of IBC, 2016 are amended, cannot give any power to either to Central Government or IBBI to act beyond the scope of delegation of powers under Section 239 and Section 240 of IBC, 2016. If it is to be interpreted in a manner otherwise, then, in that event provisions of Section 239 or Section 240 of IBC, 2016 would become redundant to this extent and which cannot be the legislative policy.
This application is allowed and the Corporate Debtor is released from all rigours of CIRP. The Corporate Debtor is directed to pay fee and all expenses incurred by the IRP since commencement of CIRP till date - Application filed under Rule 11 of NCLT Rules, 2016 stands allowed.
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Service Tax
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2021 (7) TMI 415
Levy of service tax - Agreeing to the obligation to tolerate the Act - providing maintenance services to the appellant - declared services - whether the Machine Availability clause of agreement dated 17.12.2014 creates the service tax liability upon the appellant? - HELD THAT:- It is clear from the facts that there is no denial on the part of the department, as is apparent from para 4 of the Show cause notice to the fact that the appellant/ service recipient, has already suffered service tax on the invoices raised by M/s. SGSL from time to time. The credit note issued by M/s SGSL, service provider is a refund of excessive amount paid by the appellant on account of defined service to be provided by M/s SGSL. It does not represent any service rendered by the appellant to M/s SGSL so as to attract any service liability of the appellant. The basis of transaction between the parties is the agreement dated 17.12.2014. Perusal thereof makes it abundantly clear that the appellant is service recipient and M/s SGSL is service provider. Hence the payment of service tax can be the liability only and only of M/s. SGSL.
The Machine Availability clause in the present case, to my opinion when read with the entire agreement, there is an apparent intent that the terms of agreement shall not be violated and that the service provider shall not compromise with the quality of service else the commercial interest of the appellant shall remain safeguarded in the form of compensation to be paid by M/s. SGSL. Hence, it cannot, by any stretch of imagination, be stated that the recovery of sum by invoking the said clause is the reason behind the execution of agreement for a accrued consideration.
The amount received by the appellant in terms of Machine Availability clause, from the service provider with reference to maintenance of WTG due to shortcoming in said service is merely an amount to safeguard the loss of appellant. The said amount cannot be called as consideration for the tolerance of service provided and some lacunae thereof nor it makes the appellant the service provider. Infact once the appellant receives compensation for the downfall in service quality, it is because he is not inclined to tolerate the loss as he may suffer on account of said downfall - The concept of ‘Declared Services’ has therefore been wrongly invoked by the Department and the adjudicating authority below.
The findings in order under challenge are not at all sustainable - Appeal allowed.
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2021 (7) TMI 426
Principles of natural justice - contention of the petitioner is that the petitioner has not submitted their explanation or defence statement and requested time on the ground that some Writ Petitions are pending - HELD THAT:- This Court is of the considered opinion that in all other Writ Petitions where the show cause notices are questioned before this Court, this Court passed an order, directing the petitioners to submit explanations and by following the procedures as contemplated under the Act, the final order is to be passed. In view of the said order, the present Writ Petition is also to be remanded back for a fresh consideration by the authorities.
The matter is remanded back to the respondent for fresh consideration by providing an opportunity to the writ petitioner to submit their explanations, documents and evidences and by affording opportunity of personal hearing and thereafter, pass final orders in the manner known to law - Petition allowed by way of remand.
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2021 (7) TMI 402
Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019 - non-filing of the statutory returns with intent to evade payment of service tax - non-speaking order - circular No. 1072/05/2019- CX dated 25th September 2019 - HELD THAT:- The appellant company filed an application on 31.12.2019 under SVLDRS under voluntary disclosure category by declaring their total service tax liability for the impugned period. The appellant company field the said application after their premises was searched on 20.12.2019 by DGGI, Hyderabad Zonal Unit for alleged evasion of service tax. Therefore, the application filed by the appellant company under SVLDRS was alleged to be in contravention of the provisions of Section 125(1)(f)(i) of the Finance (No 2) Act, 2019, which bars a person from making voluntary disclosure under the Scheme after being subjected to any enquiry or investigation or audit. The appellant company, however, contended that in all cases where enquiry / investigation / audit is not pending as on 30.06.2019 and where tax liability is not quantified, the designated committee is empowered to verify the eligibility in the light of facts of the case.
In the instant case, the premises of the appellant company was searched by DGGI, HZU for alleged evasion of service tax on 20.12.2019 i.e., much after the relevant date i.e., 30.06.2019. Therefore, the appellant company’s case does not fall under the category of cases who have been barred from filing a declaration in terms of Section 125(1)(f)(i) of the Finance (No 2) Act, 2019. It is not the case of the appellant company that they have been barred from filing such declaration under SVLDRS by the department. Indeed they have filed such declaration and the designated committee as per evidence available on record, has also determined t e amount to be paid under the Scheme in the prescribed form called SVLDRS-3. Such Form SVLDRS-3 was issued by the Designated Committee concerned on 09.01.2020. However, since the appellant company failed to pay the tax dues indicated in From SVLDRS-3 within 30 days after its issue, as per the Scheme announced by the Government, the discharge certificate SVLDRS-4 was not issued by the designated committee.
The grievance of the appellant company that when the original authority has taken up the show cause notice for adjudication, as an adjudicating authority he should have considered all their arguments while arriving at the correct tax liability including their eligibility for Cenvat Credit, to be legally tenable - Matter remanded to the original authority with a direction to allow CENVAT credit to the appellant company subject to the conditions laid in the Cenvat Credit Rules, 2004 including production of invoices on which credit was claimed by the appellant company; work out their net service tax liability for the impugned period and pass an appropriate order accordingly.
Extended period of limitation - Penalty - HELD THAT:- The appellant company during the impugned period provided taxable services and also collected service tax. However, they failed to pay the service tax so collected to the Government Exchequer. The appellant company also failed to file ST-3 returns for the impugned period. As rightly held by the original authority, the appellant company’s claim that they did not pay the tax on account of financial crisis is not acceptable in the light of the fact that they had collected the service tax from their customers over and above the service consideration - there are no justifiable reason to differ with the findings of the original authority to the extent of invoking proviso to Section 73(1) of the Finance Act, 1994 for recovery of service tax payable by the appellant company and imposing consequential penalty on them.
When the appellant company collected service consideration along with service tax on the taxable services provided by them during the impugned period, there are no justifiable reason for retaining the service tax so collected without paying it to the Exchequer. Such action of the appellant company clearly reveals culpable mind of the said three persons to evade payment of service tax as they were at the helm of affairs of the appellant company and directly responsible for the activities of the appellant company. As per appellant company’s own admission itself such net service tax evaded is quite huge i.e., more than ₹ 70 lakhs.
The appeal filed by the appellant company is remanded to the original authority - appeal allowed by way of remand.
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Indian Laws
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2021 (7) TMI 423
Dishonor of Cheque - power of Deputy In-charge, Principal Officer or Senior Clerk of the Company to file a complaint case against the petitioners - Adequate court fees not paid - HELD THAT:- The Court Fees Act and consequently all the Orissa State Amendment are only to providing for taxing purposes. If insufficient court fees are paid in a proceeding, be it a civil or criminal, the proceeding should not be dismissed at the threshold, rather the Court is under a duty to give a reasonable opportunity to the petitioner in a complaint case or the plaintiff in a civil proceeding to pay the deficit court fees. In no case, a proceeding should be dismissed for payment of inadequate court fees without affording a reasonable opportunity to the petitioner, complainant or the plaintiff to make good deficit court fees. This Court is of the opinion that even at the final hearing of the proceeding, if it is found that insufficient court fees has been paid, the judgment can be pronounced directing the petitioner or complainant to pay the deficit court fees, lest the final order shall not take effect.
This Court is of the opinion that there is no reason to dismiss the complaint or to allow the revision setting aside the order taking cognizance and issuance of processes by the learned Magistrate.
This Court is of the opinion that in the present cases the company has been duly authorized an authorized person. If the accused arrayed in this cases wants to disputes those facts and statements, the said issues may be raised at the time of trial of the cases and opportunities should be given to the complainant to show before the learned Magistrate that in fact, the company made a Resolution to authorize Mr. Ratnakar Nayak to file the complaint on behalf of the company and if necessary examine the Managing Director or any of the Directors of the company.
On a careful conspectus of the entire material on record as well as the law governing the field, this Court is of the opinion that the cognizance taken by the learned SDJM, Panposh cannot be quashed or set aside because of non-compliance of the provisions of the Companies Act, 1961 or for deficit court fees or for lack of jurisdiction. However, all these complaints filed before the SDJM, Panposh are allowed to be withdrawn to the complainant to be filed before the learned JMFC, Barbil within the period of limitation as prescribed from the date of such withdrawal.
Criminal Revisions are disposed of.
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2021 (7) TMI 422
Continuation of suspension of the applicant/respondent - chargesheet/charge memo not filed - penalty on delay in investigation - HELD THAT:- This Court finds that despite the lapse of two years, neither any chargesheet has been filed nor any charge memo has been issued to the applicant/respondent. As far as the issue of suspension of the petitioner and extension thereof, this Court is of the view that the Investigating Authorities have had more than sufficient time to conclude the investigation - For any delay in investigation, the applicant/respondent cannot be penalised. This Court is also in agreement with the reasoning of the Tribunal that since the applicant/applicant has now to be paid subsistence allowance equivalent to his salary, it would serve no purpose not to utilise his services.
This Court finds no ground to interfere with the impugned order in writ jurisdiction and the present writ petition along with pending applications is dismissed.
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